The Zacks Analyst Blog Highlights: Best Buy, Wal-Mart Stores, Stoneridge, Delphi Automotive and TRW Automotive Holdings
CHICAGO, Oct. 10, 2012 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Best Buy Inc. (NYSE: BBY), Wal-Mart Stores Inc. (NYSE: WMT), Stoneridge, Inc. (NYSE: SRI), Delphi Automotive PLC (NYSE: DLPH) and TRW Automotive Holdings Corp. (NYSE: TRW).
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Here are highlights from Tuesday's Analyst Blog:
Best Buy Teams Up with Brightstar
Best Buy Inc. (NYSE: BBY) recently entered into a contract with Brightstar Corp. – a multinational provider of varied solutions for the wireless devices – to look after the inventory of returned mobile devices.
Best Buy has been working with Brightstar since 2009 in the U.S. and the latter has provided various services to the company for its mobile device category. As per the agreement, Brightstar will manage the returned stock of mobile devices in a way to bring down the costs and improve efficiency.
Brightstar will provide various services such as looking after the receipt, sorting, triage, repairs, refurbishing as well as repackaging of mobile devices, which are returned to Best Buy using their service programs, comprising Trade-In and Buy Back, along with general returns and exchanges.
Utilizing the services provided by Brightstar, Best Buy can enhance the customer experience as the devices will be repaired and returned to customers within a given time frame.
Retailers are focusing on enhancing their reverse supply chain in order to reduce costs with an aim to improve customer experience. Best Buy's move to partner with Brightstar, for managing the returned inventory, is in sync with most of the retailers' opinion.
Moreover, Best Buy will take advantage of Brightstar's distribution channels in order to resale the returned devices in the secondary market. This will publicize Best Buy products in the market and will provide exchange opportunities to the customers so that they are upgraded with latest technology and products.
Currently, we have a long-term 'Underperform' recommendation on the stock based on the declining sales at the company's key categories. However, Best Buy, which competes with Wal-Mart Stores Inc. (NYSE: WMT), holds a Zacks #3 Rank that translates into a short-term Hold rating.
Stoneridge Lowers Guidance
Stoneridge, Inc. (NYSE: SRI) lowered its revenues and earnings guidance for 2012 based on weaknesses in its global operations. However, it has kept intact its margins guidance for the year.
The company has downgraded its revenue outlook for the year to $940 million–$962 million from the previous range of $970 million–$1.01 billion. The company also anticipates lower earnings per share of 35 cents to 45 cents compared with its prior outlook of 75 cents to a penny.
The lower guidance was driven by continued weakness in the European commercial vehicle business, lower shipments to a big U.S. commercial vehicle customer, and lower-than-expected second half revenue from the company's Brazilian operations, PST.
However, the company has kept its margins guidance for the core business (Electronics and Control Devices segments) and PST largely intact at 20.5%–22.0% and 40.0%–42.0%, respectively.
It also expects to generate significant free cash flow for the remainder of the year and eliminate or reduce the borrowing on its asset-based credit facility in North America, while reducing its debt level in Brazil.
Stoneridge witnessed a loss of $3.6 million or 13 cents per share in the second quarter of 2012, compared to a profit of $3.4 million or 14 cents in the corresponding quarter last year. The EPS missed the Zacks Consensus Estimate of a profit of 4 cents per share.
The year-over-year fall in earnings was attributable to lower sales of higher margin products owing to the weak Brazilian economy, unfavorable foreign currency translation and slow growth in the North American and European commercial vehicle markets.
Revenues rose 23% to $234.3 million in the reported quarter; however, it missed the Zacks Consensus Estimate of $247.0 million. The improvement in revenues was driven by operating benefits of the Brazilian joint venture, PST.
Headquartered in Warren, Ohio, Stoneridge is engaged in designing and manufacturing engineered electrical and electronic components, modules and systems for the commercial vehicles, agricultural, automotive, and off-highway vehicles and motorcycle markets.
The company competes withDelphi Automotive PLC
) andTRW Automotive Holdings Corp.
). Currently, it retains a Zacks #2 Rank, which translates into a short-term (1 to 3 months) Buy rating. The company will release its third-quarter 2012 results on October 24.
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